Mortgage war takes rate to below 2%

THE mortgage war which has broken out in recent weeks has been stepped up again after a bank launched its lowest ever two-year fixed rate.

THE mortgage war which has broken out in recent weeks has been stepped up again after a bank launched its lowest ever two-year fixed rate.

Borrowers need a hefty 40% deposit to take out HSBC’s 1.99% market-leading deal and will need to stump up a £1,999 fee, or £1,499 for HSBC current account holders.

Mortgage lenders have been slashing their rates following the introduction of a multibillion-pound Government scheme in August to boost borrowing by giving lenders access to cheap finance. The number of mortgages on the market has increased by nearly a fifth since the scheme started.

HSBC is not part of the Funding for Lending scheme and said that, as with its mortgages generally, the deal is primarily funded by retail deposits.

Rachel Springall, spokeswoman for comparison website Moneyfacts, warned similar deals to that being offered by HSBC have recently appeared on the market and have been withdrawn within weeks.”

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